Forex news for NY trading on July 23, 2020

In other markets:

  • Spot gold is trading up $13.23 or 0.71% at $1884.61. The high nearly got to the $1900 level reaching $1898.34. The low extended to $1863.80. Spot silver prices meanwhile fell $0.50 or -2.17% to $22.49. It's high price reached $23.27 while the low extended to $22.26. Recall yesterday silver was up over 7% on the day.
  • WTI crude oil futures fell $0.85 or -2.03% to $41.05. The high price reached $42.36 while the low extended to $40.83. Yesterday there was a surprise build and inventories. The concerns about a slowing economy helped to push the price back down today.

The day today was characterized as a risk off trading day in the forex market the flow funds were into the CHF and JPY. On the downside riskier currencies like the AUD and NZD were sold. The US dollar was mixed today with most of the gains vs. AUD and NZD and declines vs the CHF, JPY and EUR.

Forex news for NY trading on July 23, 2020_

The coronavirus statistics today saw high levels of cases. The reported deaths also remained above the 1000 level.

With regard to the relief package, the GOP is saying that they will unveil the relief package early next week. The details are still sketchy with the emergency unemployment benefits a wild card. However, the president has backed off is payroll tax reduction idea after even members of his own party balked at the idea. Regarding the emergency unemployment benefits, recall from yesterday they floated the idea of the emergency benefits plunging to $100 per week vs. the current $600. Today they spoke of workers getting 70% of their salaries. A question that may be asked is how do you determine the salary of someone who makes most of their income from tips and not salary? Most of those types of workers (i.e. restaurant employees) are bucketed in that group.

In the US debt market today, traders poured money into the longer end, flattening the yield curve in the process. A look at the yield curve shows:

  • 2 year 0.151%, +0.2 basis points
  • 5 year 0.2675%, -0.6 basis points
  • 10 year 0.577%, -2.0 basis points
  • 30 year 1.231%, -6.1 basis points

Looking at some of the currency pairs:

  • EURUSD:The EURUSD extended above the 50% retracement of the move down from the 2018 high at the 1.15958 level and also the natural resistance at 1.1600. The Price scooted up to a high of 1.1626, but gave up some of those gains into the close and is trading back below the 1.1600 level. That level will be the barometer for the buyers and sellers in the new trading day. Stay below is more bearish. Move above is more bullish
  • USDJPY: The USDJPY start of the day with a narrow 13 pip trading range. In the 1st few hours the range extended to 16 pips, but as stocks fell, more more selling entered into the pair. The break to new session low saw traders push on the downside. By the end of the day the high low trading range had expanded to 53 pips and push the price back toward the lows seen over the last few weeks between 106.629 and 106.705. The low for the day 106.704 before rebounding up to 106.85 near the close.
  • GBPUSD: for the 3rd day in a row, the GBPUSD trade above and below its 200 day moving average. The pair fell in the London session but found support initially against that moving average level. As New York traders arrived however sellers push the price below the 200 day moving average only to find support near the 38.2% retracement and rising 100 hour moving average around the 1.2669 level. Buyers push the price all the way back higher to new session highs but fell short of the high for the week at 1.2767. The hi for the day reached 1.2759. In the new day getting above the high for the week would be more bullish. On the downside the 100 hour moving average is rising and currently at 1.2679. Above it sits the 200 day moving average at 1.2696. If the price is to go lower both of those moving averages would need to be broken.